(Source: Jurgen Appelo via flickr)
YouTube Vs. The Music Industry - Can YouTube Do Better?
WEDNESDAY // October 25, 2017
The ongoing battle between YouTube and the music industry is not anything new these days, but the last week of music industry news has definitely kept this conversation going.
Today, an artist-run advocacy organization for musicians titled Content Creators Coalition (c3), launched a digital ad campaign directed toward YouTube. The campaign is titled “YouTube Can Do Better” with the hashtag reading #updatetheDMCA.”
The hashtag calls on Congress to update the 1998 - yes you read that correctly - 1998 Digital Millennium Copyright Act (DMCA), basically pushing to break down the huge barrier artists are faced with between their content rights and Big Tech.
In the video shown below titled "Pennies vs. Dollars," a woman role-plays as YouTube and gives an artist a few bucks as compensation for his very successful song. Another man represents a lawyer who then mocks the artist and is seemingly impossible to receive any legal help from. You may visit the campaigns site for more videos here.
This digital campaign sparks conversation to an issue already backed by factual data. Let’s look at the most recent data from the September 2016 Music Consumer Insight Report from IFPI (International Federation of the Phonographic Industry), a company representing the interests of the recording industry worldwide.
According to this report, video streaming websites such as YouTube account for 55% of on-demand music streaming - with 46% coming from YouTube alone.
And if it couldn’t get any worse, 85% of these YouTube users (1.3 billion) listened to music for free in September alone. Compared to YouTube’s 1.3 billion, Spotify has around 140 million active users.
Being a very small victory for record labels, Post Malone’s Billboard Top No.1 track “Rockstar” took a swipe at YouTube’s free streaming by having the track loop the chorus for the 3:38 duration of the song, here.
Apparently many people still listen to this loop -- 61,374,100 loops to be exact. The video has a link embedded on the upper right hand corner reading “Listen to the Song Here”, directing viewers to various channels including Spotify, Apple Music, iTunes and Google Play.
Many have questioned Malone’s validity, then, in “Rockstar” positioned as No.1 last month, since Billboard accounted all YouTube plays at that time. In response to the music industry’s pressure on Billboard giving equal weight to paid streams and free streams to determine their music charts, Billboard announced last week that this practice will end.
Apple Music’s Jimmy Lovine summed it up perfectly, stating, “How can the record industry let that go down? It is not in their interest to promote a free tier,” NBC reported last week.
Eliminating Malone's chart-hacking accusations and the charts altogether, Malone's record label went around publishing the song on YouTube in its entirety, forcing viewers to re-navigate to alternate sites for the original song.
Obviously, unlike Malone, smaller artists need to utilize YouTube to grow, but not to the extent of the video streaming service withholding what the artist actually earned.
Let’s look at YouTube’s defense. If you can recall, back in August 2017 YouTube Executive Lyor Cohen said on its blog, that YouTube pays a $3 CPM to artists, or $3 every 1,000 plays, assuming each of those plays has ads on them.
However, there have been many reports of these claims not ringing true.
For example, artist Nicki Jaine from the duo Revue Noir, told Digital Music News last week, that despite their 1,254,626 YouTube views, the artists only received $42.56. Another musician made a similar claim, revealing he received only $64.60 from 1,048,893 views.
According to YouTube’s ad revenue of 2017, the amount comes out to approximately $3.5 billion according to eMarketer. Where is this money going? The music industry is no stranger to The Value Gap.
But let’s not forget the fine print of Cohen’s statement, right? Also in his post, Cohen mention’s that this $3 CPM figure only applies to views in the U.S. He claims “the numbers get diluted by lower contributions in developing markets.” But what about all the other developed nations?
Digital Music News, experienced with advertising payout data, explains that either way, U.S. based advertising “fetches a far higher premium online”
Either way, Cohen's uses absolutely no evidence to back his claims. In fact, the artist who "earned" $64.60, the artist only earned 1/50th of what Cohen claimed, Digital Music News calculated.
These unanswered questions, ripped off artists and ballpark figures Cohen throws around undoubtedly raises eyebrows and takes a dig into both Cohen and YouTube’s transparency.
For now, organizations such as the IFPI and the Content Creators Coalition continue to fight for the challenges artists face against large video streaming services such as YouTube dominating the music industry. The release of these reports and now the Content Creators Coalition digital marketing campaign will hopefully keep the conversation going and growing. Whether or not Cohen's figures are true, something must be done to make this fair, with as much transparency as humanly possible.
